House weighs insurer merger bill
08 02 08 - 12:12
Health insurers that consolidate in Colorado would undergo a more rigorous review process under a bill the state Legislature is considering.
But a representative of health plans told the House Business Affairs and Labor Committee that insurance companies in Colorado already face plenty of scrutiny from federal and local regulators.
And at least one legislator worries that more regulation might drive some insurers out of Colorado.
The committee heard testimony Thursday on House Bill 1131, sponsored by Rep. Anne McGihon, D-Denver, and Sen. Bob Hagedorn, D-Aurora.
The bill requires the Colorado Division of Insurance to conduct an independent investigation to determine how proposed mergers of insurance companies would affect the competitive market.
It also requires the commissioner to issue a report on proposed mergers and extends the notification period so that interested parties can have more time to give public or written testimony about the deals.
Mike Huotari, executive director of the Colorado Association of Health Plans, said with an estimated 350 insurers serving Colorado, there are few barriers to entry for competitors thinking about entering the market.
Rep. Victor Mitchell, R-Castle Rock, said the bill won't thwart mergers, since most occur outside of the state. Instead, insurers simply would pull out of the market.
But Rep. Dorothy Butcher, D-Pueblo, asked that if mergers improve insurers' economies of scale, why health insurance premiums aren't more stable.
Huotari said other factors, such as rising health care costs, are driving up rates. But he said consolidation helps holds prices lower than they would be otherwise.